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You must analyze a potential new producta caulking com- pound that Cory Materials R&D people developed for use in the residential construc- tion industry. Corys marketing manager thinks the company can sell 115,000 tubes per year at a price of $3.25 each for 3 years, after which the product will be obsolete. The required equipment would cost $150,000, plus another $25,000 for shipping and installa- tion. Current assets (receivables and inventories) would increase by $35,000, while cur- rent liabilities (accounts payable and accruals) would rise by $15,000. Variable cost per unit is $1.95, fixed costs (excluding depreciation) would be $70,000 per year, and fixed assets would be depreciated under MACRS with a 3-year life. (Refer to Appendix 12A for MACRS depreciation rates.) When production ceases after 3 years, the equipment should have a market value of $15,000. Corys tax rate is 40%, and it uses a 10% WACC for average-risk projects.

1. Find the required Year 0 investment and the projects annual cash flows. Then calcu- late the projects NPV, IRR, MIRR, and payback. Assume at this point that the project is of average risk.

2. Suppose you now learn that R&D costs for the new product were $30,000 and that those costs were incurred and expensed for tax purposes last year. How would this affect your estimate of NPV and the other profitability measures?

*Note,

Please show the steps in Excel and how it is done from Excel only, showing step by step. Different experts have done this part, but I need it to be done through excel with showing the steps in how it is done. Thank you.